The ITO, Ward-1, GANDHIDHAM V. Shri Madhukumar V. Gupta, GANDHIDHAM

ITA 558/RJT/2012

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2256 (ITAT-RAJKOT)
• Duration Of Justice: 6 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 09-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA
• Keywords: Rule of consistency; Competent authority
• Section: 10AA; 10; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 558/RJT/2012 / ASSESSMENT YEAR: 2009-10 ITO, WARD 1, GANDHIDHAM. VS. SHRI MADHUKAR V. GUPTA, PROP. M/S. CHEMICAL SOLUTION, PLOT NO.444, SECTOR-IV, KANDLA SPECIAL ECONOMIC ZONE, GANDHIDHAM. (PAN NO. AHKPG 9904 A) / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI M. J. RANPURA, A.R. REVENUE BY : SHRI PRAVEEN VERMA, SR. D. R. / DATE OF HEARING : 11.09.2018 / DATE OF PRONOUNCEMENT : 01.11.2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF T HE REVENUE AGAINST THE APPELLATE ORDER OF THE LEARNED COMMISSIONER OF IN COME-TAX (APPEALS)-II, RAJKOT [CIT(A) IN SHORT] RELEVANT TO ASSESSMENT YEAR 2009-10. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,37,83,808/- AFTER CONSIDERING THAT MERE REPACKING OF GOODS IN SAME FORM AS MANUFACTURING / SERVICES WHICH IS A PREREQUISITES FOR CLAIMING EXEMPTION U/S. 10AA. 2. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,37,83,808/- AFTER HOLDING THAT THE ASSESSEE WAS ENGAGED IN BLENDING ACTIVITIES DESPI TE THE FACT THAT THERE WAS NO CHANGE IN OUTWARD AND INWARD QUANTITY OF CHEMICALS AS MENTIONED BY THE A.O. IN ITS ASSESSMENT ORDER AND THUS THERE WAS NO BLENDING ACTIVITIES BEING CARRIED OUT. 3. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,37,83,808/- AFTER HOLDING THAT THE ASSESSEE WAS ENGAGED IN BLENDING ACTIVITIES IGNORING THE FACT THAT BLENDING OF CHEMICALS REQUIRES SPECIAL INSTRUMENTS / 2 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 MACHINERY AND TEMPERATURE CONDITIONS AND IN MOST OF THE CHEMICALS REACTION EITHER THERE IS GAIN OR LOSS OF WEIGHT. 4. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,37,83,808/- AFTER HOLDING THAT FORM NO. 56F IS NOT A PREREQUISITE DOCUMENT FOR CLAIMING EXEMPTION U/S. 10AA AFTER IGNORING THE FACT THAT INCOME T AX ACT ITSELF SPECIFIES THAT CLAIM OF EXEMPTION U/S. IOAA SHOULD BE SUPPORT ED B% THE FORM NO. 56F AND SHOULD BE A PART OF THE AUDIT REPORT. 5. THE LD. C1T(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,37,83, 808/- AFTER HOLDING THAT EVEN IF IT IS ASSUMED THAT THE ASSESSEE ARE OF TRADING IN NATURE BUT STILL THEY FALLS UNDER SERVICES WHICH IS AGAINST THE SPIRI T OF THE LAW. TRADING OF GOODS CANNOT BE TERMED AS RENDERING OF ANY KIND OF SERVICE. 6. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,37,83,808/- AFTER HOLDING THAT SALES TAX NUMBER IS OF NO IMPORTANCE FOR PROVING TRADING ACTIVITIES OF THE ASSESSEE AFTER IGNORING THE FACT THAT THE NUMBER WAS OBTAINED BY THE ASSESSEE DECLARING HIMSELF AS TRADER. 7. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1,37,83,808/- AFTER IGNORING THE FACT THAT THE IEC CODE OF THE ASSESSEE IS OF MERC HANT EXPORTER NOT OF MANUFACTURER. 8. IT IS THEREFORE PRAYED THAT THE ORDER OF LD. CIT(A) BE SET ASIDE AND THAT OF A.O. BE RESTORED TO THE ABOVE EXTENT. 3. THE ONLY EFFECTIVE ISSUE RAISED BY THE REVENUE IS THAT LD. CIT(A) ERRED IN ALLOWING THE EXEMPTION U/S 10AA OF THE ACT FOR RS.1,37,83,808/-. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIV IDUAL AND ENGAGED IN THE BUSINESS OF EXPORT OF CHEMICALS AND SOLVENTS UNDE R THE NAME AND STYLE OF M/S. CHEMICAL SOLUTIONS, A PROPRIETORSHIP CONCERN. THE MANUFACTURING UNIT OF THE ASSESSEE IS LOCATED IN SPECIAL ECONOMIC ZONE (SEZ ) AT KANDLA. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS CLAIMED A DEDUCTION OF RS. 1,38,88,410/- U/S 10AA OF THE ACT. 4.1 THE AO DURING THE ASSESSMENT PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS NOT CARRIED OUT ANY MANUFACTURING ACTIVITY FOR THE AR TICLES AS SPECIFIED 3 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 UNDER CLAUSE (J) OF SECTION 2 OF THE SEZ ACT 2005. ACCORDI NGLY, THE AO WAS OF THE VIEW THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 10 AA OF THE ACT. 4.2 THE AO DURING THE ASSESSMENT PROCEEDINGS OBSERVED CERTAIN FACTS AS ENUMERATED BELOW: I. THE STOCK REGISTER IS SHOWING INWARD AND OUTWARD QUANT ITY OF DIFFERENT CHEMICALS PURCHASED AND SOLD BY THE ASSESSEE DURING THE YEAR. THERE WAS NO MENTION FOR ANY PRODUCTION PROCESS. T HE ASSESSEE HAS ALSO NOT SHOWN ANY LOSS/ GAIN WHICH THE ASSESSEE HAS SUFFERED DURING THE PROCESS OF MANUFACTURING. II. THERE WAS NO CERTIFICATE FURNISHED BY THE ASSESSEE IN FORM 56F ALONG WITH TAX AUDIT REPORT WHICH IS A MANDATORY REQUIREMENT FOR CLAIMING THE DEDUCTION U/S 10AA OF THE ACT. III. THE MANUFACTURING UNIT OF THE ASSESSEE IS REGISTERED WI TH THE SALES TAX DEPARTMENT AS AN IMPORTER, RESELLER, RETAILER AND WHOLE S ELLER/ STOCKIEST WHICH SHOWS THAT THE ASSESSEE IS IN THE TRAD ING ACTIVITY AND NO MANUFACTURING ACTIVITY IS BEING CARRIED OUT BY THE ASSESSEE. IV. THE MATERIAL PURCHASED BY THE ASSESSEE AND SOLD TO HI S CUSTOMERS HAVING THE SAME CHARACTERISTIC IN THE SAME FORM. THUS, T HERE WAS NO CHANGE IN THE SPECIFICATION OF THE CHEMICALS WHICH WER E PURCHASED AND SOLD. V. ON SCRUTINY OF THE PURCHASE BILL, THE AO OBSERVED THAT THE ASSESSEE IS PURCHASING CHEMICALS IN LARGE QUANTITY AND SELLING THE SAME IN SMALL QUANTITY SUBSEQUENTLY AFTER REPACKING. VI. THERE WAS NO CLAIM BY THE ASSESSEE IN HIS PROFIT AND LO SS ACCOUNT FOR ANY TYPE OF MANUFACTURING EXPENSE. 4 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 VII. THE TAX AUDIT REPORT OF THE ASSESSEE ALSO DOES NOT CON TAIN ANY INFORMATION FOR THE MANUFACTURING ACTIVITY CARRIED OUT BY T HE ASSESSEE. VIII. THE REPORT OF THE INSPECTOR DEPUTED TO VERIFY THE A CTIVITIES OF THE ASSESSEE SUBMITTED THAT THERE WAS NO MANUFACTURING ACTIVI TY AT THE FACTORY PREMISES OF THE ASSESSEE. IX. THE INVESTMENT IN THE PLANT AND MACHINERY IS OF RS. 3.30 LAC S ONLY. MOST OF THE ITEMS OF PLANTING MACHINERY ARE NOT REPRES ENTING COMPLETE MACHINERY RATHER THESE ARE REPRESENTING THE C OMPONENTS OF THE MACHINERY. X. THE ASSESSEE IN ITS BOOKS OF ACCOUNTS HAS NOT CREATED A NY RE- INVESTMENT RESERVE. IN VIEW OF THE ABOVE, THE ASSESSEE WAS SHOW-CAUSED TO E XPLAIN THE DEDUCTION CLAIMED U/S 10AA OF THE ACT. THE ASSESSEE IN COMPLIANCE TO IT SUBMITTED THAT IT IS BLENDING DIFFERENT CHEMICALS BY MIXING AND SUBSEQUENTLY REPACKING THEM FOR EXPORTS. 4.3 AS PER THE ASSESSEE, THE ACTIVITY OF BLENDING IS MAN UFACTURING IN NATURE AS DEFINED UNDER CLAUSE (R) OF SECTION 2 OF SPE CIAL ECONOMIC ZONE ACT 2005. 4.4 THE BLENDING/MIXING IS CARRIED OUT IN A DIFFERENT COMPOSITION WHICH IS USED BY DIFFERENT INDUSTRIES SUCH AS PAINT & COATING INDUSTRY, PRINTING INK INDUSTRY, OIL FIELD INDUSTRY, AND FOOD PACKAGIN G INDUSTRY, ETC. 5 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 4.5 THE ASSESSEE ALSO SUBMITTED THAT ANY CHANGE IN THE COMBINATION OF CHEMICALS & SOLVENT RESULTS CHANGES IN THE NAME, CHARAC TERISTICS, AND CATEGORY OF THE SOLVENT. 4.6 THE AUDITOR HAS NOT SPECIFIED ANY MANUFACTURING ACTIV ITY IN HIS AUDIT REPORT BECAUSE THERE WAS NOT MUCH DIFFERENCE BET WEEN THE RAW MATERIALS AND FINISHED GOODS MANUFACTURED BY THE ASSESS EE. AS SUCH, DIFFERENT TYPES OF CHEMICALS ARE PURCHASED WHICH ARE M IXED IN THE DIFFERENT COMPOSITION WHICH RESULTS IN A NEW, DIFFERENT PRODUCT , BUT IT REMAINS AS CHEMICAL EVEN AFTER BLENDING. THOUGH THE ACTIVITY OF M ANUFACTURING WAS CARRIED OUT, THE TAX AUDITOR DID NOT REPORT THE SAME IN HIS TAX AUDIT REPORT DUE TO NO CHANGE IN THE RAW MATERIAL AS WELL AS FINISHED PRODUCT. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE ASSE SSEE BY OBSERVING THAT THE ASSESSEE IS MANUFACTURING 7 MT PER DAY WHICH IS NOT POSSIBLE WITHOUT USING ANY MACHINERY IN THE MANUFACTURING PROCE SS. THUS, THE ARGUMENT OF THE ASSESSEE THAT THE BLENDING ACTIVITY WAS CARRIED OUT MANUALLY WAS REJECTED. ACCORDINGLY, THE AO DISALLOWED THE CLAIM OF THE ASSESSEE U/S 10AA OF THE ACT AND ADDED BACK THE SUM OF RS. 1,38,88,410/- TO TH E TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LD. CIT(A). THE ASSESSEE BEFORE THE LD CIT(A) SUBMITTED AS UNDER: I. THE DEFINITION GIVEN UNDER SEZ ACT FOR MANUFACTURING IS INCLUSIVE MEANING THEREBY THE SCOPE OF THE WORDS USED FOR THE DEFINITION CAN BE ENLARGED. THE ASSESSEE IN SUPPORT OF HIS ARGUMENT RELIE D ON THE 6 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 HONBLE APEX COURT IN THE CASE OF DR. P. VADAMALAYAN VS. CI T REPORTED IN 74 ITR 94. II. THE SEZ ACT 2005 WAS MADE TO ACHIEVE THE OBJECT OF EXIM POLICY (NO W KNOWN AS FOREIGN TRADE POLICY) TO BRING MORE FOREIGN EXCHANGE, TO GENERATE EMPLOYMENT AND DEVELOPED THE BACKWARD AREAS, ETC. THERE WAS NO DEFINITION OF MANUFACTURE U/S 10A OF THE ACT. THE REFORE THE SAME WAS BROUGHT FROM CLAUSE 9.3 OF CHAPTER IX OF EXIM PO LICY WHICH SAYS THAT REPACKING WILL AMOUNT TO MANUFACTURE. THEREFORE , THE ASSESSEE CONTENDED THAT THE WORD MANUFACTURE SHOULD BE CONSTRUCTED LIBERALLY AND ACCORDINGLY REPACKING SHOULD ALSO BE TRE ATED AS MANUFACTURING. III. THE UNIT OF THE ASSESSEE HAS BEEN DULY APPROVED UNDER SECTION 15 OF SEZ AFTER VERIFYING THE NECESSARY ACTIVITY OF THE ASSES SEE. THEREFORE, ONCE THE UNIT HAS BEEN REGISTERED UNDER SEZ ACT, THEN THE SAME SHOULD BE ELIGIBLE FOR DEDUCTION U/S 10AA OF THE ACT. IV. THE AO ERRED IN RELYING ON THE INWARD AND OUTWARD OF P URCHASES AND SALES AS A DECIDING FACTOR WHETHER THE ASSESSEE IS CARRYI NG OUT ANY MANUFACTURING ACTIVITY OR NOT. AS SUCH, THE ASSESSEE PUR CHASES A LARGE QUANTITY OF CHEMICALS WHICH ARE BLENDED WITH OTHER SO LVENT AND SUBSEQUENTLY EXPORTED AS PER THE SPECIFICATION OF THE PURCHASE ORDER. THEREFORE, THE ASSESSEE IS CARRYING OUT THE BLENDING ACTIVITY . V. THE ASSESSEE ALSO SUBMITTED THAT THE CHEMICALS ARE IMPO RTED FROM DIFFERENT COUNTRIES LIKE GERMANY, TAIWAN, IRAN, ETC. HOWEV ER, THESE PRODUCTS SUBSEQUENTLY ARE EXPORTED TO DIFFERENT COUN TRIES IN SMALL QUANTITY AS SPECIFIED IN THE PURCHASE ORDER. VI. THE ASSESSEE HAS ALSO CLAIMED DEDUCTION U/S 10AA OF THE ACT IN THE IMMEDIATELY PRECEDING YEAR WHICH WAS ALLOWED BY THE RE VENUE. THEREFORE THE PRINCIPLE OF CONSISTENCY SHOULD BE APP LIED IN THE CASE ON HAND. THE ASSESSEE IN SUPPORT OF HIS CLAIM RELIED ON TH E ORDER OF 7 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 HONBLE KARNATAKA HIGH COURT IN THE CASE OF BARAKA OVERS EAS TRADERS VS. CIT REPORTED IN 67 TAXMAN 188 WHEREIN, IT WAS HELD AS UNDER: WHETHER PROCESSING OF MARINE PRODUCTS AND RAW BEEF AND PA CKING THEM FOR EXPORT CONSTITUTE MANUFACTURE OR PRODUCTION OF AN A RTICLE OR A THING FOR PURPOSE OF SECTION 80HH - HELD, YES VII. THE ASSESSEE ALSO SUBMITTED THAT CONSIDERING THE WIDE SCOPE OF THE DEFINITION OF THE TERM MANUFACTURE THE ACTIVITIES OF THE SIMILAR NATURE SUCH AS REPACKING WILL ALSO FALL WITHIN THE AMBIT OF THE TERM MANUFACTURE. THE ASSESSEE IN SUPPORT OF HIS CLAIM RELI ED ON THE ORDER OF HONBLE KERALA HIGH COURT IN THE CASE OF M/S. GIRNAR INDUSTRIES VS. CIT REPORTED IN 338 ITR 277. VIII. THE ASSESSEE ALSO SUBMITTED THAT THE REQUIREMENT OF FI LING THE CERTIFICATE IN FORM 56F IS DIRECTORY IN NATURE. THEREF ORE NON-FILING OF THE SAME WILL NOT RESULT IN THE DENIAL OF THE EXEMPT ION U/S 10AA OF THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT THE FORM 56F WAS DULY FILED DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSEE IN SUPPORT OF HIS CLAIM RELIED ON THE ORDER OF DELHI HIGH COURT I N THE CASE OF CIT VS. WEB COMMERCE (INDIA) PVT. LTD. REPORTED IN 318 ITR 135. IX. THE ASSESSEE ALSO RELIED ON THE ORDER OF DELHI HIGH COURT IN THE CASE OF CIT VS. CONTIMETERS ELECTRICALS PVT. LTD. REPORTED IN 317 ITR 24 9. X. THE ASSESSEE ALSO SUBMITTED THAT THE ITEMS WHICH HAVE BEEN SHOWN IN THE BALANCE SHEET ARE PLANT AND MACHINERY WHICH ARE USED F OR THE MANUFACTURING ACTIVITY. THEREFORE THE ALLEGATION OF THE AO THAT THE PLANT AND MACHINERY IS OF RS. 3.30 LACS ONLY IS NOT CORRECT . SIMILARLY, THE ASSESSEE DEMONSTRATED THAT THE TOTAL VALUE OF THE I NVESTMENT MADE IN THE FIXED ASSETS EXCLUDING BUILDING IS COMING FRO M RS. 50.84 LACS AS AGAINST RS.3.30 LACS OBSERVED BY THE ASSESSING OFFICER. XI. THE ASSESSEE WAS NOT LIABLE TO PAY ANY SALE TAX AS ITS MANUF ACTURING UNIT IS LOCATED UNDER THE SEZ ACT. HOWEVER, BEFORE GE TTING THE UNIT 8 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 REGISTERED UNDER THE SEZ, IT WAS MANDATORY FOR THE ASSE SSEE TO FURNISH THE SALES TAX REGISTRATION. THEREFORE IT WAS FURNISHED T O THE AUTHORITIES OF SEZ. THEREFORE, THE SALES TAX REGISTRATION CERTIFICAT E CANNOT BE A CRITERION FOR HOLDING THAT THE ASSESSEE IS NOT CARRYIN G OUT ANY MANUFACTURING ACTIVITY. XII. THE ASSESSEE ALSO SUBMITTED THAT ALL THE REQUIREMENTS AS SPECIFIED UNDER THE SEZ ACT FOR REGISTRATION WERE DULY COMPLIE D WITH. THUS, NO RELIANCE CAN BE PLACED ON THE SALES TAX REGISTRATION CERT IFICATE. THE ASSESSEE IN RESPONSE TO HIS CLAIM RELIED ON THE ORDE R OF DELHI TRIBUNAL IN THE CASE OF AMD EXPORT CORPORATION VS. ITO REPORTED IN 79 ITD 381. XIII. IN THE FIRST FIVE YEARS, THERE WAS NO REQUIREMENT TO C REATE ANY REINVESTMENT RESERVE IN THE BOOKS OF ACCOUNTS. THEREF ORE, THE ASSESSEE CANNOT BE DENIED FOR THE EXEMPTION U/S 10AA OF THE AC T ON THE GROUND THAT THE ASSESSEE IS FAILED TO CREATE REINVEST MENT RESERVE IN ITS BOOKS. XIV. THE ASSESSEE WITHOUT PREJUDICE TO THE ABOVE, REFERRED TO THE DEFINITION OF SERVICE AS PROVIDED UNDER SECTION 2(Z)(1) OF SEZ 2005 WHICH READS AS UNDER: '(Z) 'SERVICES' MEANS SUCH TRADABLE SERVICES WHICH, - (I) ARE COVERED UNDER THE GENERAL AGREEMENT ON TRADE IN SERVIC ES ANNEXED AS IB TO THE AGREEMENT ESTABLISHING THE WORLD TR ADE ORGANIZATION CONCLUDED AT MARRAKES ON THE 15TH DAY OF APRIL , 1994; (II) MAY BE PRESCRIBED BY THE CENTRAL GOVERNMENT FOR THE PURPO SES OF THIS ACT; AND (III) EARN FOREIGN EXCHANGE;' FURTHER, RULE 76 OF SPECIAL ECONOMIC ZONES RULES 2006, DEFINES SERVICES FOR PURPOSE OF SECTION 2(Z)(L) OF SPECIAL EC ONOMIC ZONES ACT, 2005, WHICH IS REPRODUCED AS UNDER: '76. THE 'SERVICES' FOR THE PURPOSES OF [1] [CLAUSE] [ SU B- CLAUSE] (Z) OF SECTION 2 SHALL BE THE FOLLOWING, NAMELY:- 9 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 TRADING, WAREHOUSING, RESEARCH AND DEVELOPMENT SERVICES, COMPUTER SOFTWARE SERVICES, INCLUDING INFORMATION EN ABLED SERVICES SUCH AS BACK-OFFICE OPERATIONS, CALL CENTERS, CONTEN T DEVELOPMENT OR ANIMATION, DATA PROCESSING, ENGINEERING AND DESIGN, GRAPHIC INFORMATION SYSTEM SERVICES, HUMAN RESOURCES SERVICES, INSURANCE CLAIM PROCESSING, LEGAL DATA BASES, MEDICAL TRANSCRIP TION, PAYROLL, REMOTE MAINTENANCE, REVENUE ACCOUNTING, SUPPORT CENT ERS AND WEB-SITE SERVICES, OFF-SHORE BANKING SERVICES, PROFESS IONAL SERVICES (EXCLUDING LEGAL SERVICES AND ACCOUNTING) RENTAL/LEASIN G SERVICES WITHOUT OPERATORS, OTHER BUSINESS SERVICES, COURIER S ERVICES, AUDIO- VISUAL SERVICES, CONSTRUCTION AND RELATED SERVICES, DIST RIBUTION SERVICES (EXCLUDING RETAIL SERVICES), EDUCATIONAL SERVIC ES, ENVIRONMENTAL SERVICES, FINANCIAL SERVICES, HOSPITAL S ERVICES, OTHER HUMAN HEALTH SERVICES, TOURISM AND TRAVEL RELATED SERVICES , , RECREATIONAL, CULTURAL AND SPORTING SERVICES, ENTERT AINMENT SERVICES, TRANSPORT SERVICES AUXILIARY TO ALL MO DES OF TRANSPORT, PIPELINES TRANSPORT. EXPLANATION.- THE EXPRESSION 'TRADING', FOR THE PURPOSES OF THE SECOND SCHEDULE OF THE ACT, SHALL MEAN IMPORT FOR T HE PURPOSES OF RE-EXPORT.' THE ASSESSEE ON THE BASIS OF THE ABOVE SUBMITTED THAT THE ACTIVITY OF SPECIFIC TRADING IS ALSO COVERED UNDER THE DEFINITION OF SERVI CE. THEREFORE HE IS ELIGIBLE FOR DEDUCTION U/S 10AA IN RESPECT OF THE EXPORT SALES . XV. THE ASSESSEE ALSO SUBMITTED THAT THE PROVISIONS CONTA IN U/S 10AA OF THE ACT ARE A BENEFICIAL PROVISION WHICH IS ENACTED TO ALLOW THE ASSESSEE TO SET UP THE UNITS IN THE BACKWARD AREAS SO TH AT THERE CAN BE COMMERCIAL AND INDUSTRIAL DEVELOPMENT. THEREFORE, THE PROVISION OF SECTION 10AA OF THE ACT SHOULD BE READ LIBERALLY. THE AS SESSEE IN RESPECT OF HIS CLAIM RELIED ON THE JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. SOUTH ARCOT DISTRICT COOPERATI VE MARKETING SOCIETY LTD. REPORTED IN 176 ITR 117. 10 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 HOWEVER, THE LD. CIT-A AFTER CONSIDERING THE SUBMISSIO N OF THE ASSESSEE DELETED THE ADDITION MADE BY THE AO IN PART BY OBSERVING AS UN DER: 10. I HAVE GIVEN MY CAREFUL CONSIDERATION TO THE VARIOUS RE ASONS GIVEN BY THE ASSESSING OFFICER FOR DENIAL OF EXEMPTION AND THE WRITT EN SUBMISSIONS AND VERBAL ARGUMENTS MADE BEFORE ME ON BEHALF OF THE APPEL LANT. I HAVE ALSO CAREFULLY GONE THROUGH THE RELEVANT PROVISIONS OF LAW ON THIS ISSU E AS ALSO THE CASE LAWS CITED BEFORE ME. AS MENTIONED ABOVE, THE MAIN CAUSE FOR DENIAL OF EXEMPTION BY THE ASSESSING OFFICER IS THAT THE UNIT AT KSEZ IS NOT ENGAGED IN ANY MANUFACTURING OR PRODUCTION ACTIVITY AND AT THE MOST IT CAN BE STATED THAT THERE IS A SMALL ACTIVITY OF BLENDING OF CHEMICALS AND MAINLY THE ACTIVITY IS CONFINED TO REPACKING OF MATERIALS IMPORTED IN TANKERS IN SMALL DRUMS OR CARBOYS AS PER THE REQUIREMENTS OF THE CUSTOMERS. FIRST OF ALL, IT MAY B E NOTED THAT THE WORD 'MANUFACTURING' FOR THE PURPOSES OF SECTION 10AA HAS BEE N DEFINED IN SECTION 2(R) OF THE SEZ ACT, 2005 AND THIS DEFINITION IS INCLUSIVE DEF INITION WHICH INCLUDES BLENDING ALSO. SINCE IT IS AN INCLUSIVE DEFINIT ION, IT CAN BE FURTHER EXTENDED TO SIMILAR ACTIVITIES. IT IS TRUE THAT THE PRIMA RY PURPOSE OF INSERTION OF SECTION 10AA IN THE INCOME-TAX ACT WAS TO CONTINUE THE BENEFITS OF SIMILAR NATURE AS PROVIDED U/S.10A. THE TERM 'MANUFACTURE' FOR THE PURPOSE OF SECTION 10A WAS DEFINED IN CLAUSE 9.3 OF CHAPTER IX OF 'EXIM POLICY'. THIS DEFINITION, AS REPRODUCED ABOVE, ALSO INCLUDES REPACKING. IN THE PRE SENT CASE, THE APPELLANT HAS IMPORTED SEVERAL VARIETIES OF CHEMICALS AND SOLVENTS I N. TANKERS IN LARGE QUANTITIES AND EXPORT IS TO BE MADE IN SMALL QUANTITI ES AS PER THE REQUIREMENTS SPECIFIED IN THE PURCHASE ORDERS. ACCORDINGLY, THE CHEMICA LS ARE REPACKED IN DRUMS/CARBOYS. FURTHER, IF SO REQUIRED IN THE PURCHASE ORDER, BLENDING IS DONE BEFORE REPACKING. FOR EXAMPLE, TOLUENE IS IMPORTED FR OM IRAN AND THE SAME IS BLENDED WITH ACETONE AND THE RESULTANT PRODUCT IS GP THINN ER WHICH IS EXPORTED TO EMIRATES NATIONAL CHEMICALS INDUSTRIES. THESE FACTS ARE PROVED FROM ANNEXURE-B AND ANNEXURE-C ATTACHED TO THE WRITTEN SUBMISSI ONS. FURTHER, THE APPELLANT HAS OBTAINED APPROVAL FROM THE DEVELOPMENT CO MMISSIONER IN FORM-G AS PER RULE-19 OF SEZ RULES, 2006, COPY OF WHICH HAS BEEN F ILED AS ANNEXURE-A TO THE WRITTEN SUBMISSIONS. 11. FROM THE FACTS MENTIONED ABOVE, THERE IS NO DOUBT THAT THE UNIT OWNED BY THE APPELLANT IS DEFINITELY ENGAGED IN BLENDING AND REPA CKING THE IMPORTED CHEMICALS IN SMALL DRUMS AND CARBOYS DURING THE YEAR UNDER CONSIDERATION AS IS EVIDENT FROM ANNEXURE-D OF THE WRITTEN SUBMISSIONS. IN THI S REGARD THE APPELLANT HAS STRONGLY RELIED ON THE HON'BLE KERALA HIG H COURT JUDGEMENT IN THE CASE OF GIRNAR INDUSTRIES VS. CIT, 338 ITR 277 WHICH HAS BEEN RE NDERED IN THE 11 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 CONTEXT OF PROVISIONS OF SECTION 10A AND 10AA. RELEVANT PA RT OF THIS JUDGEMENT HAS BEEN REPRODUCED ABOVE WHEREIN IT HAS BEEN HELD BY THE HON' BLE COURT THAT REPACKING AND BLENDING IS INCLUDED FOR THE PURPOSES OF A LLOWING EXEMPTION UNDER THE ABOVE PROVISIONS. 12. THE EQUIPMENTS LIKE DRUM, RE-FILLING MACHINE, HO T WATER GENERATOR, MS TANK ETC., IN MY VIEW, ARE IN THE NATURE OF PLANT AND M ACHINERY USED FOR BLENDING AND REPACKING AND OTHER SIMILAR ACTIVITIES. WHATEVER EXPE NDITURE INCURRED IS DEBITED IN THE ACCOUNTS AND IT IS NOT NECESSARY THAT THER E SHOULD BE LOSS OF WEIGHT WHILE CARRYING OUT SUCH ACTIVITIES. NON-SUBMISSION OF FOR M 56F IS ONLY A PROCEDURAL REQUIREMENT AND ONCE THIS FORM IS SUBMITTED BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS, IT WOULD AMOUNT TO SUFFICIENT COMPLIANCE OF THE PROVISIONS AS HELD BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF WEB COMMERCE INDIA PVT. LTD. (SUPRA) AND CONTIMETERS ELECTRIC ALS PVT. LTD. (SUPRA). IN MY VIEW, THE ASSESSING OFFICER'S OBSERVATION THAT SAL ES-TAX REGISTRATION NUMBER REFERS TO THE APPELLANT ONLY AS A TRADER IS AL SO OF NO CONSEQUENCE BECAUSE SUCH CERTIFICATE IS GRANTED FOR THE SPECIFIC PURPOSE O F LEVY OF SALES-TAX. THE ASSESSING OFFICER'S OBSERVATION REGARDING CREATION O F RESERVE IS ALSO OF NO CONSEQUENCE BECAUSE THIS QUESTION WOULD ARISE ONLY AFTE R 10 YEARS. THERE IS SUBSTANCE IN THE ARGUMENT OF THE APPELLANT THAT EVEN IF IT IS ASSUMED THAT THE APPELLANT IS ENGAGED ONLY IN TRADING, EVEN SUCH TRADING I S FULLY COVERED UNDER THE TERM 'PROVIDING ANY SERVICES' AS DEFINED IN SECTION 2(Z) (L) OF SEZ ACT, 2005 READ WITH RULE 76 OF THE SEZ RULES, 2006 WHICH HAVE BEEN REPRODU CED ABOVE. THE APPELLANT'S UNIT LOCATED AT KSEZ HAS OBTAINED ALL P ERMISSIONS, APPROVALS AND CERTIFICATES FROM THE CONCERNED AUTHORITIES FOR THIS P URPOSE AS WELL. BEING AGGRIEVED BY THE ORDER OF LD CIT(A) REVENUE IS IN APPEAL BEFORE US. 6. THE LD. DR BEFORE US SUBMITTED THAT THE ASSESSEE IS NOT CARRYING OUT ANY MANUFACTURING ACTIVITY AS PER THE PROVISIONS OF SECTIO N 10AA OF THE ACT. THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 10AA OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF AO. 7. ON THE OTHER HAND, LD. AR BEFORE US FILED A PAPER BOO K RUNNING FROM PAGES 1-104 AND DREW OUR ATTENTION ON THE PROCESS FLOWC HART DEMONSTRATING THE 12 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 MANUFACTURING OF CHEMICALS WHICH IS PLACED ON PAGES 54 O F THE PB. THE RELEVANT EXTRACT OF THE CHEMICALS PROCESS FLOW CHART IS REPRODUCED AS UN DER: PROCESS FLOW CHART FOR CHEMICAL BLENDS. THE LD AR REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT-A AND VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT-A. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MAT ERIALS AVAILABLE ON RECORD. THE ISSUE IN THE CASE RELATES TO THE DEDUCT ION CLAIMED BY ASSESSEE U/S 10AA. AS PER THE AO, THE ASSESSEE IS NOT ENGAGED IN THE MANUFACTURI NG ACTIVITY. THEREFORE THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 10AA OF THE ACT. HOWEVER, THE VIEW OF THE AO WAS SUBSEQUENTLY REVERSED BY THE LD. CIT(A) ON THE GROUND THAT EVEN THE TRADING ACTIVITIES DONE FOR THE PURPOSE OF EXPORT ARE ELIGIBLE FOR DEDUCTION U/S 10AA OF THE ACT. CHEMICAL IS RECEIVED IN THE FACTORY CHEMICALS ARE UNLOADED IN DRUMS AS PER PREDETERMINED RATIO CHEMICALS ARE MIXED IN DRUMS AS PER RATIO CHEMICALS BLEND IS READY. DRUMS ARE PACKED IN CONTAINERS FOR EXPORT 13 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 8.1 THE ONLY CONTROVERSY BEFORE US IS THAT WHETHER THE ASSESSEE IS CARRYING OUT ANY MANUFACTURING ACTIVITY FOR EXEMPTION U/S 10AA OF THE ACT. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE AO HAS NOT DOUB TED THE ACTIVITY OF TRADING CARRIED OUT BY THE ASSESSEE. THE ASSESSEE IS IM PORTING DIFFERENT KINDS OF CHEMICALS AND EXPORTING THE SAME AFTER REPACKING. SUCH AC TIVITY OF THE ASSESSEE IS ALSO COVERED UNDER THE DEFINITION OF SERVICE AS SP ECIFIED UNDER SECTION 2(Z)(I) OF SEZ ACT, 2005. THE RELEVANT EXTRACT OF THE DEFINITION READS AS UN DER: 76. THE SERVICES FOR THE PURPOSES OF [1] [CLAUSE] (Z) OF SECTION 2 SHALL BE THE FOLLOWING, NAMELY:- TRADING, WAREHOUSING, RESEARCH AND DEVEL OPMENT SERVICES, COMPUTER SOFTWARE SERVICES, INCLUDING INFORMATION EN ABLED SERVICES SUCH AS BACK- OFFICE OPERATIONS, CALL CENTRES, CONTENT DEVELOPMENT OR ANIMATION, DATA PROCESSING, ENGINEERING AND DESIGN, GRAPHIC INFORMATIO N SYSTEM SERVICES, HUMAN RESOURCES SERVICES, INSURANCE CLAIM PROCESSING, LEGA L DATA BASES, MEDICAL TRANSCRIPTION, PAYROLL, REMOTE MAINTENANCE, REVENUE A CCOUNTING, SUPPORT CENTRES AND WEB-SITE SERVICES, OFF-SHORE BANKING SERVICES, PROFE SSIONAL SERVICES (EXCLUDING LEGAL SERVICES AND ACCOUNTING) RENTAL/LEASING SERVICES WITHOUT OPERATORS, OTHER BUSINESS SERVICES, COURIER SERVICES, AUDIO-VISUAL SERVIC ES, CONSTRUCTION AND RELATED SERVICES, DISTRIBUTION SERVICES (EXCLUDING RETAIL SERVICES), EDUCATIONAL SERVICES, ENVIRONMENTAL SERVICES, FINANCIAL SERVICES, HO SPITAL SERVICES, OTHER HUMAN HEALTH SERVICES, TOURISM AND TRAVEL RELATED SERVICES, RECREATIONAL, CULTURAL AND SPORTING SERVICES, ENTERTAINMENT SERVICES, TRANSPO RT SERVICES, SERVICES AUXILIARY TO ALL MODES OF TRANSPORT, PIPELINES TRANSPORT. [1] [EXPLANATION: THE EXPRESSION TRADING , FOR THE PURPOSES OF THE SECOND SCHEDULE OF THE ACT, SHALL MEAN IMPORT FOR THE PURPOSES OF RE- EXPORT.] FROM THE ABOVE, IT IS AMPLY CLEAR THAT SERVICE INCLUDES TRADING ACTIVITY IF IT RELATED TO THE IMPORT OF THE GOODS FOR THE PURPOSE OF THE EXP ORT. 8.2 NOW THE NEXT QUESTION ARISES WHETHER THE PROVISION S OF INCOME TAX ACT 1961 WILL PREVAIL OVER THE PROVISIONS OF THE SPECIAL ECO NOMIC ZONES ACT, 2005. AT THIS POINT IT IS IMPORTANT TO REFER THE RELEVANT P ROVISIONS OF SECTION 51 OF SEZ ACT 2005 WHICH IS GIVEN BELOW:- 14 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 51.(1) THE PROVISIONS OF THIS ACT SHALL HAVE ACT TO HAVE EFFEC T NOTWITHSTANDING ANYTHING INCONSISTENT OVERRIDING EFFECT, THEREWITH CONTAIN ED IN ANY OTHER LAW FOR THE TIME BEING IN FORCE OR IN ANY INSTRUMENT HAVING EFF ECT BY VIRTUE OF ANY LAW OTHER THAN THIS ACT. 8.3 FROM THE READING OF THE ABOVE IT IS CLEAR THAT THE PRO VISIONS AS SPECIFIED UNDER THE SPECIAL ECONOMIC ZONES ACT, 2005 WOULD HAVE OVE RRIDING EFFECT ON THE INCOME TAX ACT. THE SAME VIEW HAS ALSO BEEN HELD IN THE OWN CASE OF THE ASSESSEE BY THE HONBLE ITAT IN ITA NO.30/KOL/2012 FOR THE AY 2008-09 VIDE ORDER DATED 13/11/2013. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUC ED BELOW:- 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEV ANT MATERIAL ON RECORD. THE FIRST OBJECTION OF THE ASSESSING OFFICER WAS THAT THE BENEFIT OF SECTION 10AA OF THE ACT IS LOST WHEN THE ASSESSEE IS ENGAGED SOLE LY IN TRADING ACTIVITIES. IT HAS BEEN NOTICED ABOVE THAT SECTION 10AA(1) ALLOWS BENEFITS, INTER ALIA, FOR THE PROVISIONS OF ANY SERVICES BY AN ELIGIBL E ENTERPRISE. OBVIOUSLY, THE ERSTWHILE PARTNERSHIP FIRM I.E., M/S MIDAS INTERNATIONAL WAS PERMITTED TO DO TRADING BY THE COMPETENT AUTHORITY. THE FIRM GOT CONVERTED INTO A SSESSEE COMPANY AND CONTINUED THE SAME BUSINESS WITH THE PRIOR PE RMISSION FROM THE COMPETENT AUTHORITY UNDER THE SEZ ACT. THE DEFINITION OF S ERVICE IN THE SEZ ACT INCLUDES TRADING ACTIVITY. IN THAT VIEW OF THE MATT ER, IT BECOMES MANIFEST THAT THE TRADING ACTIVITY HAS BEEN PERMITTED BY THE COMPETE NT AUTHORITY UNDER THE SEZ ACT. AS SUCH, THERE CAN BE NO QUESTION OF DENIA L OF EXCEPTION US/S 10AA OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED ON RECORD A COPY OF AN ORDER PASSED BY THE JAIPUR BENCH IN DCIT VS. GOENKA DIAMOND & JEWELLERS LTD . IT APPEAL NO. 509(JP) OF 2011 2012(050)-SOT-0307-TJAI IN WHICH IT HAS BEEN HELD THAT TRADING OF THE ELIGIBLE GOODS ENTITLES THE SE TO THE BENEFIT OF SECTION 10AA OF THE ACT. SIMILARLY, THE COPY OF ANOTHER ORDER PAS SED BY MUMBAI BENCH IN M/S GITANJALI EXPORTS CORPORATION LIMITED VS. ADCIT IN ITA NO. 6947 & 6948/MUM/2011 DATED 08-05-2013 HAS ALSO BEEN PLACED ON RECORD IN WHICH THE VIEW EXPRESSED BY THE JAIPUR BENCH HAS BEEN REITERATED. NO CONTRARY PRECEDENT HAS BEEN BROUGHT TO OUR NOTICE BY THE LD. DR. IN VIEW OF THE TWO TRIBUNALS ORDERS AVAILABLE ON THE POINT ALLOWING EXEMPTION U/S. 10A A OF THE ACT IN RESPECT TO TRADING ACTIVITIES, WE ARE OF THE CONSIDERED OPINION THAT NO EXC EPTION CAN BE TAKEN TO THE VIEW EXPRESSED BY THE LD. CIT(A) IN GRANTING THE EXEMPTI ON. 15 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 8.4 WE ALSO NOTE THAT THE MINISTRY OF COMMERCE AND INDUST RY, DEPARTMENT OF COMMERCE (EPZ SECTION) HAS ALLOWED THE TRADING ACTIVI TY FOR EXEMPTION U/S 10AA OF THE ACT EVEN IF THE ASSESSEE IS ENGAGED IN THE IMPORT OF GOODS FOR THE PURPOSE OF EXPORTS. THE RELEVANT EXTRACT OF THE INSTRU CTION NO 1/2006 DATED 24- 03-2006 AND INSTRUCTION NO 4/2006 DATED 24-05-2006 READS AS UNDER: INSTRUCTION NO 1/2006 DATED 24-03-2006 AS DECIDED IN THE MEETING, YOU MAY KINDLY NOTE THAT TRADING FOR THE PURPOSES OF RULE 76 OF THE SEZ RULES WOULD BE CONFI NED TO IMPORT OF GOODS FOR EXPORTS. ACCORDINGLY, IN THE CASE OF PROPOS0ALS FOR SETTING UP OF TRADING UNITS, THE APPROVAL COMMITTEE MAY CONSIDER INCORPOR ATING A PROVISO TO CLAUSES (I) AND (IV) (FORM G). THE PROVISO MAY READ AS UNDER:- PROVIDED THAT A UNIT HAVING LETTER OF APPROVAL FOR TRADING SHALL NOT PROCURE GOODS FROM THE DTA FOR TRADING. INSTRUCTION NO 4/2006 DATED 24-05-2006 THIS DEPARTMENT HAS BEEN RECEIVING REPRESENTATIONS ON DIFFICULTIES FACED BY THE EXISTING SEZ UNITS HOLDING APPROVAL TO DO TRADING, THA T THEIR EXPORTS ARE ADVERSELY AFFECTED AND ALSO THAT SEVERAL OF THEIR ORDERS ARE HELD UP DUE TO THE RESTRICTION ON TRADING ON ACCOUNT OF THE ABOVE INSTRU CTION. TAKING COGNIZANCE OF THESE REPRESENTATIONS, IN PARTIAL MODIFICATION O F THE ABOVE REFERRED INSTRUCTION DATED 24 TH MARCH, 2006, IT HAS BEEN DECIDED THAT WHILE UNITS IN THE SPECIAL ECONOMIC ZONE WHO HOLD APPROVAL TO DO TRADING ACT IVITIES WILL BE ALLOWED TO CARRY OUT ALL FORMS OF TRADING ACTIVITY, THE B ENEFITS UNDER SECTION 10AA WILL EXCLUDE TRADING OTHER THAN TRADING IN THE NATURE OF RE-EXPORT OF IMPORTED GOODS. APPROPRIATE AMENDMENTS IN THIS REGARD ARE BEING ISSUED. IN THE MEANTIME, SOURCING FROM DOMESTIC AREA MAY B E PERMITTED BY UNITS IN THE SEZS WHICH ARE ALLOWED TO DO TRADING, SUBJEC T TO THIS CIRCULAR BEING CITED AND ON PRODUCTION OF AN UNDERTAKING BY THE CO NCERNED UNIT THAT NO INCOME TAX BENEFITS WILL BE AVAILED BY THE UNIT FOR TRADING, EXCEPT IN THE NATURE OF RE-EXPORT OF IMPORTED GOODS. DEVELOPMENT COMMISSIONERS ARE REQUESTED TO NOTE THE A BOVE AND TAKE APPROPRIATE ACTION. 16 ITA NO.558/RJT/2012 ITO VS. SHRI MADHUKAR V. GUPTA AY : 2009-10 FROM THE ABOVE, IT IS CLEAR THAT THE ACTIVITY OF THE ASSESSEE E VEN TRADING IN NATURE WILL ALSO BE ELIGIBLE FOR EXEMPTION U/S 10AA OF THE ACT AS DISCU SSED ABOVE. 8.5 AS THE ACTIVITY OF THE ASSESSEE IS ELIGIBLE FOR DED UCTION U/S 10AA OF THE ACT. WE ARE NOT INCLINED TO ADJUDICATE OTHER POINTS OF C ONTENTIONS RAISED BY THE REVENUE AND THE LD. COUNSEL FOR THE ASSESSEE AT THE TI ME OF THE HEARING. THUS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD CIT( A). HENCE, THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 1 ST NOVEMBER, 2018 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER ( WASEEM AHMED ) ACCOUNTANT MEMBER AHMEDABAD; DATED 01/11/2018 PRITI YADAV, SR.PS ! / COPY OF THE ORDER FORWARDED TO : 1. !' / THE APPELLANT 2. #$!' / THE RESPONDENT. 3. % & ' / CONCERNED CIT 4. & ' ( ) / THE CIT(A)- II, RAJKOT. 5. () * # , , /DR,ITAT, RAJKOT 6. * + , - / GUARD FILE. / BY ORDER, $ ( # //TRUE COPY// ' / # $% ( DY./ASSTT.REGISTRAR) &'( , / ITAT, RAJKOT